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The Big Lie About GE’s Huge Untaxed Profits

April 13th, 2011 ·

You know, I like Jon Stewart. He’s a funny guy. And I don’t generally mind him poking fun at politicians and policies I support. What I do mind is when he breaks the illusion of somewhat legitimate comedy-news by repeating lies straight out of the talking points of the political left, letting himself be used as their late-night pointman, mainstreaming those lies into the public debate out of the mouths of the many people who get their only news from his show.

Last week, Stewart went on repeatedly about how General Electric reaped huge profits of $149 billion yet paid not a penny in taxes. It’s a great argument to make at a time when everyone is paying their own taxes and easy to drive to outrage over a huge corporation not paying their fair share. The problem is that it’s a lie. It takes advantage of the ignorance of too much of the public about what is meant by profits. Yes, GE’s corporate revenue was $149 billion in 2010. However, that is not the same as profit.

After subtracting all of the costs of operating their business, their actual Net Profit was less than $11 billion. That’s the money they had left over to actually spend after paying all of their bills. That’s a far cry from the huge profit number which anti-corporatists have been promoting. It’s actually a relatively low profit margin of only 7.4%. What’s more, it’s not really their profit, because every cent of it gets payed out to stockholders who also pay taxes on it.

There are also a couple of other problems in this criticism of GE. First, they actually did pay taxes. Not a huge amount, but their income statement clearly shows that they paid total taxes of $1.05 billion to the federal government. That’s just under 10% in taxes on their Net Profit. Second, there’s the issue of what they did with their profits. Those profits went to the people who own stock in the company, which actually included me up until fairly recently. Almost all of those profits were divided up and then individual stockholders also paid taxes on their share of profits, likely at the capital gains rate of 15%, so in actuality the profits were taxed twice, adding up to a total rate of about 24.5%.

There’s a simple way for the average taxpaying John Stewart watcher to relate to GE’s taxes. Just compare them to your own taxes. All the money you earn during a year is your Gross Income, the equivalent of GE’s $149 billion in corporate revenue. The standard exemptions and deductions which every taxpayer can take then reduce that amount and what’s left is your Adjusted Gross Income. Your deductions and exemptions are like the operating expenses which GE deducts from its income, so your Adjusted Gross Income is equivalent to their $11 billion Net Profit. For both of you that’s the actual amount which is taxed. If you have an average income you pay 15% on that while GE pays only 10% on theirs. So far they’re a little ahead. But unlike you they then have to give all that money away, and the stockholders they give it to then pay 15% on it again, so the total rate of tax paid on that money before anyone can spend it is 24.5% a higher rate of tax than you pay unless you earn over about $44,000 a year as a single taxpayer. If you earn between $45,000 and $95,000 you pay about the same rate as GE. Only if you earn more than $95,000 do you pay more in tax as a percentage than GE does. And for the record, the taxes GE payed in 2010 were estimated quarterly payments, rather like the withholding taken out of your paycheck, not their final tax bill.

So the truth is that GE paid an entirely reasonable level of tax in 2010 and people like Jon Stewart, Michael Moore, ABC News, The New York Times and others who want to tear down our capitalist system are just lying to you and hoping you won’t check the facts. And remember this isn’t the only thing they lie about for partisan reasons. Guess who would really get hammered if we actually responded to their call to “repeal the Bush tax cuts.” One hint. It’s not the super-rich.

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Texas Lawmaker Offers Sensible Immigration Alternative

March 15th, 2011 ·

I was not particularly impressed with Paul Workman when he ran as a Republican for State Representative in Texas district 47. I supported his opponent in the primary and kind of ignored him in the general election as I live one district over from his district. But this week he got my attention in a way which I never expected, by proposing a state bill (HB2886) to implement a guest worker program for illegal aliens under the authority of the Texas state government.

I like the way that Workman is thinking outside of the box and looking for creative and realistic solutions to the problems posed by illegal immigration. He seems to be taking a lead from Arizona’s efforts to take the immigration issue away from the federal government, but instead of following their draconian course he’s acknowledging the benefits of immigrant labor and going after the real problems created by having those workers in an underground labor market which lowers wages, increases crime and makes the illegal population difficult to regulate effectively.

It’s a big step for a Republican to acknowledge that we might have to live with immigrant labor and need to find ways to make the best of it. Workman’s background in the construction industry presumably gives him a heightened awareness of the issue. While other legislators are trying to follow Arizona’s strategy of more legal restrictions and crippling penalties for businesses, Workman is going after the real problems with a realistic solution.

Most of the problems associated with having an underground labor force come directly from the fact that their illegal status encourages them to work for lower wages and not pay their way in society. Making them legal guest workers would put them into the normal wage market so that they would not undercut native workers. This addresses the complaint that they are taking jobs from Americans. You won’t be able to go out and hire an illegal for 30% less than a native worker anymore. Making them legal will also mean that they will no longer have to work off the books and it will bring them fully into the tax structure so that they will pay for the services they use, just like anyone else. This addresses the common complaint that illegals send their kids to schools and use medical services without paying for them. Making them legal also means that they are less likely to be forced into crime or be victimized by criminals because of the vulnerability created by their illegal status.

Just having a guest worker program will not suddenly start giving jobs to Mexicans and taking them away from American workers. It does nothing to make immigrants more qualified and takes away their low wage advantage. We’ve already seen that as unemployment has gone up, illegals have been going back to Mexico by the millions. Those who remain behind already have jobs or are part of the criminal underground. A guest worker program will make the working illegals visible and will expose those who are potential criminals. You would give the workers a work visa and round up everyone who doesn’t have one and send them home.

The illegal immigration problem is one which comes primarily from the conflict between a natural free market in labor and government’s attempts to limit that market and make it unfree. If you take away government’s negative role in suppressing the access of workers to available jobs, then you have a healthier and more free labor market where workers go where the opportunities are and everyone benefits.

This is not to say that Workman’s bill is perfect. It places an unreasonably high cost on a work visa at $4000. While he claims that’s equivalent to what these workers pay a coyote to get here, he overlooks the fact that it will likely be in addition to those expenses which were already paid or will still have to be paid to get into the country if the federal government is not cooperating at the border.

Workman’s bill includes some additional safeguards which may allay some concerns, but could be problematic. The guest worker permit would last for 8 years and applicants would have to pass a criminal background check. It also requires that employers provide guest workers the same benefits they offer other employees and that American workers be given preference in hiring. That last provision may be hard to enforce and along with the $4000 fee it might have a chilling effect and discourage workers from taking part in the program. For such a program to work it needs to be clearly advantageous for workers who are currently illegal to take advantage of it.

One thing which is clear is that Workman has done his homework. That 8 year duration is clearly based on studies which show that the average illegal worker stays in America for about 8 years before going back to Mexico voluntarily to enjoy the benefits of the money he has earned here. More than 80% of illegals do not want to stay in the US but want to return to Mexico and start their own businesses and thereby raise up the Mexican economy and create better jobs at higher wages there, ultimately reducing the pressure to come to America for work.

There are constitutional and jurisdictional issues raised by the bill. As Workman said, “the feds are going to blow a gasket.” As with the Arizona bill this proposal challenges federal authority to control immigration policy and it will butt heads directly with federal immigration enforcement efforts, feeble though they are. Once again this is state government stepping in to do a job which the federal government is supposed to do but has repeatedly failed at, particularly by not enacting a sensible policy like this themselves. Unlike the Arizona law this addresses real problems in a positive way.

Workman is not alone in this effort. A similar bill has already passed in Utah and is waiting for the Governor’s signature. If Workman also succeeds here in Texas it’s likely that other states will follow his lead when they see it is a more sensible alternative to doing nothing or taking the kind of action Arizona has taken.

I’m pleasantly surprised to see a proposal like this and Workman deserves a lot of credit for coming up with a good idea and not listening to the vocal nativist minority in his own party. A policy like this is good for business, good for legal and illegal workers and makes all of our citizens safer. Creating a more free market in labor reduces crime and increases prosperity for everyone.

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Marco Rubio Fails to Deliver on Tea Party Promises

March 15th, 2011 ·

There’s a lot of murmuring in the right-wing grassroots that the reform-minded Congressional freshmen elected by the Tea Party movement are not turning out to be nearly as principled or effective as many had hoped they would be. There’s a serious concern that they are selling out to establishment interests or were never really sincere in their beliefs and were just pandering to the activists in order to get elected.

The problem here is exemplified by the newly formed Tea Party Caucus in the House. A look at their membership list reveals many long-time incumbents, some of them with terrible voting records on fiscal issues and on reducing the size and intrusiveness of government. I need only point to two of the worst from my own state of Texas, Lamar Smith and Joe Barton, two of the worst pro-establishment, big-spenders in the House and ones who have been there a long time. In fact, both of them are likely to face Tea Party primary challengers in 2012. There are some good legislators and serious reformers on the list like Roscoe Bartlett, Louie Gohmert and Joe Wilson, but they’re all established incumbents. The problem is that nobody owns the Tea Party brand, so anyone can claim to represent them, no matter how ridiculous that claim is.

Some of the biggest names associated with the Tea Party have been among the most disappointing, particularly Allen West and Marco Rubio from FLorida, while a small number have stuck to their guns like Justin Amash, Rand Paul and Mike Lee. Rubio remains one of the darlings of the more mainstream Republican wing of the Tea Party, but he’s a long-time political insider in Florida politics and it’s clear from his latest press release that he really doesn’t get it.

In this press release Rubio talks about the obstructionism of Demcorats in the Senate in blocking passage of the proposed budget bill, while he acts as if what he and other House Republicans sent to the Senate was actually a good bill full of meaningful cuts, which is far from the truth. Rubio writes:

“Democrats’ unwillingness to engage on this issue is leading us closer to a catastrophic debt spiral that will irreversibly damage our government, our economy and ultimately our country.”

Which makes a valid point about the utter irresponsibility of Senate Democrats in trying to pass a budget with only $4.7 billion in cuts, which Rubio points out is just the amount the government spends in 30 hours. I also have to give Rubio a nod for great political rhetoric when he says “I did not come to the U.S. Senate to be part of some absurd political theatre.” The problem is that he is himself engaging in the most twisted act of political theatre on the national stage, the attempt to present the budget passed in the House as a meaningful cut in spending.

What Rubio does not mention here in his otherwise very positive sounding press release is that the Republican-authored budget bill which he was supporting only cuts $57 billion in spending, enormously less than is necessary — by his metric less than 2 weeks of government spending. He also fails to mention that he is as unwilling to touch war and defense spending as the Democrats are to touch entitlement spending. If he’s serious about being the fiscal conservative he promised to be then he should be just as angry with Congressional Republicans who failed to make more meaningful cuts or to make cuts which could get bipartisan support.

What Rubio demonstrates here is that he is willing to talk big and bash the Democrats but he and other Tea Party endorsees are unwilling to follow their big talk with meaningful action or creative solutions. Where are all those members of the Tea Party Caucus? Most of them voted for the bloated budget they sent on to the Senate and few of them made any effort to propose more substantive cuts, Rubio among them. They have left us no better off than we were before, because they have not offered substantial cuts which could also pass with bipartisan support in the Senate, and the only way to do that would have been to end the wars and cut military spending substantially in addition to more of the small cuts they did propose.

This problem goes beyond just the budget fiasco. During the last couple of weeks most of those Tea Party representatives also voted for the renewal of three key provisions of the Patriot Act which are widely opposed by the people who voted them into office. They are also doing nothing to block the implementation of the REAL ID bill which is also strongly opposed by the grassroots political right. Some of these failures can be dismissed as the result of inexperience, but surely the many seasoned legislators in the Tea Party Caucus are giving the newer members wise advice and guidance? I’m sure they are, and that advice is to not rock the boat, line their pockets and do nothing substantive.

Many in the Tea Party and many grassroots Republicans are feeling some buyer’s remorse right now and with 2012 coming around the corner this may lead to a renewed push for change and a movement which becomes more hostile to Republican incumbents as it pushes a second generation of insurgent candidates.

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What if You Gave a Candidate Forum and Nobody Came?

March 8th, 2011 ·

With little fanfare and limited press coverage, the first candidate forum of the 2012 Republican presidential primary was held in Iowa yesterday. The forum was sponsored by Ralph Reed’s Faith and Family coalition and was intended to be the major opening event of the election season. Instead, none of the major candidates showed up and it fizzled out with lukewarm press coverage and little followup from the sponsors, who haven’t even bothered to post video of the event to their YouTube page, though it did play live on C-SPAN.

An unkind observer might think that they are embarrassed that their major event to promote social conservatism in the Republican primary went off with a fizzle and passed nearly unnoticed by the party and was treated dismissively by the media. The sad truth is that of the 16 candidates generally believed to be running, only 5 chose to attend the FFC forum, and none of the major figures were there. The most prominent stars in their constellation of also-rans were Newt Gingrich who has some popularity within the party but is utterly unelectable, Herman Cain who is a great speaker but an outsider without a strong base of support and the increasingly disappointing flash-in-the-pan Tim Pawlenty, who got some early excitement but has already peaked and lost the interest of party activists.

The big guns were not there by choice. Although invited, Ron Paul, Mitt Romney, Sarah Palin and Mike Huckabee were not in attendance. Nor were any of the exciting second-tier candidates like Governors Gary Johnson and Mitch Daniels, both of whom have charted a course focused on economic issues and actively downplaying any radical social agenda. Ron Paul was in Iowa, but chose to make a speech at a local university instead of attending. Romney and Johnson are focusing on New Hampshire. Daniels is recovering from a shoulder injury. Ironically, the most excited press coverage of the event focused on the exclusion of openly gay Republican Fred Karger who has followed up by filing an FEC complaint against the FFC.

Most of the performances were relatively uninspiring, as you might expect from a group of relatively unimpressive candidates. Not surprisingly the focus was on social issues, tailored to please the audience, coming from candidates who wouldn’t have been attending if they weren’t comfortable with that agenda, or perhaps because they are just desperate. There wasn’t a lot of red meat to be found, but Herman Cain gives one hell of a stump speech. I give him credit for being the only candidate who didn’t pander to the crowd by playing up his religious beliefs. He comes off kind of like a cross between Martin Luther King and Ronald Reagan.

With all the general excitement about the election, I think it is very telling that there was so little interest in attending this particular forum despite its key location and potentially large audience. It’s clear that major candidates are distancing themselves from the religious right and didn’t want to be seen in a context where they had to present themselves as too socially conservative. An awareness may finally be dawning among Republicans that the kind of pandering to the evangelical minority that may help you in a primary election in an extremely conservative state like Iowa is not going to help you in the general election and might even hurt you in key early primaries in other states like New Hampshire.

Aside from Cain, who may have made it through this forum looking strong and sensible by comparison, I think this may turn out to have been a farewell appearance rather than a campaign opener for most of these candidates.

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GOP Starts Primary with Strategy Built to Lose in 2012

March 6th, 2011 ·

The 2012 election may become one of the most hotly contested elections of all time. With a resurgence of popular political activism, a costly and seeming endless war, a failing economy and a controversial president, the election is rich with opportunity and there are plenty of opportunists out there ready to grab for it.

One effect of this is that potential candidates are entering the public parade even earlier than usual and the stage for their beauty contest is the Iowa Caucus which kicks off the election. Likely candidates are looking for a message which will resonate in Iowa and give them a boost starting off the election.

Coming out of his victory in the CPAC straw poll, the first candidate to try to grab that spotlight was Representative Ron Paul (R-TX) who fired the opening salvo of the election with a long and convoluted statement opposing gay marriage and supporting the Defense of Marriage Act, addressed to the people of Iowa.

For those who have an overly idealistic view of the libertarian-leaning Republican, his latest statement on gay marriage is in direct contradiction to statements made early in the previous presidential race in an interview with John Stossel. In that interview Paul unequivocally stated his principled opposition to government definition of marriage:

“Stossel: Should gays be allowed to marry?
Paul: Sure. They can do whatever they want and they can call it whatever they want…they can’t make me personally accept what they do…as a matter of fact, I’d like to see all governments out of the marriage question. I don’t think it’s a state function. It’s a religious function.”

Yet Dr. Paul’s recent defense of DOMA in response to President Obama’s decision to stop enforcing it on constitutional grounds, takes the position that it is acceptable for state governments to define marriage and impose that definition on churches and that the DOMA’s federal level definition of marriage is also acceptable. He argues that DOMA stops “Big Government in Washington from re-defining marriage and forcing its definition on the States,” but the fact is that the act does impose a definition of marriage on the states, just one which excludes gay couples.

Gay marriage is a hot topic in Iowa. After courts there ruled gay marriage legal on constitutional grounds, activists targeted the state and got the legislature to pass its own Defense of Marriage Act and got the judges who made the ruling voted off the bench. This statement may help Paul in the short term with conservative Iowa primary voters, but it may cost him and all Republicans in the general election. This starts the campaign off on a divisive message on a social issue which fragments the Republican party, taking a position which is poison with key independent voters.

It now seems that Paul has started a trend. This week likely candidates Sarah Palin and Tim Pawlenty joined him in opposing the Obama position on DOMA. Palin cleverly tried to transfer the blame for DOMA to Democrats while still supporting it:

“I have always believed that marriage is between one man and one woman. Like the majority of Americans, I support the Defense of Marriage Act and find it appalling that the Obama administration decided not to defend this federal law which was enacted with broad bipartisan support and signed into law by a Democrat president.”

It now seems quite likely that other Republican candidates will be encouraged to follow this same strategy and play up divisive social issues like gay marriage in the primary. This presumably seems advantageous to them going into a primary with a large field of candidates, but what is winning that primary worth if by moving to the right on social issues they cost whoever ends up winning the Republican nomination key votes in the general election?

Their strategy is making the entire party look more radical on social issues than it really is. Polling shows that 59% of Republicans support gay marriage or civil unions. The numbers may be less favorable in Iowa, but those who put gay marriage on the front burner may even be weakening themselves in the primary in other states. It is also a risky face for the party to present to independent voters who support gay marriage or legal civil unions by a large 73% majority. To win in 2012 the Republican nominee will need every independent vote he can get and losing half or more of them over radicalism on social issues is a formula for defeat.

It’s also drawing inevitable criticism from the media and the political left and gives opportunistic social conservatives a legitimacy and a level of influence which they really don’t merit. This early move essentially forces the whole party to the right on secondary issues while distracting from a more effective pro-jobs, pro-growth and small government message which has broad appeal. Down the road when the eventual Republican nominee wants to run on important issues of national policy the result of these choices in Iowa will be that he will have to defend the unappealing positions which the party and its candidates took on these divisive issues early in the election.

Some candidates like gay Republican Fred Karger and the strongly principled Gary Johnson may be able to stand apart from the taint of the Iowa campaign, but Karger appears to be skipping Iowa entirely and Johnson will likely be shooting for the anonymity of the middle of the pack and saving his efforts for later.

Beginning with his speech at CPAC, Governor Mitch Daniels has worked hard to separate himself from the religious right and publicly push for a truce on social issues to keep his campaign viable on a national level. His statements have touched off a backlash from social conservatives whose answer is to promote their issues even more aggressively. The result of this disagreement may well be a split within the Republican Party and when that division leads to defeat in 2012 the rift may prove irreparable.

It’s still early in the primary process, but the Republican Party has been set on what may be a path towards self-destruction. If candidates continue to follow the herd and pander to a divisive minority which does not have the best interests of the party or the nation at heart, by the time the election finally comes around, what looks like a real shot at victory today may well have already been thrown away. A party which puts its worst face forward by letting its most extreme elements set its agenda may not have much of a future.

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CPAC Generates a Circus Tent Full of Conservative Controversy

March 6th, 2011 ·

Like thousands of Republicans, libertarians, conservatives and other folks from the political right I took a trip last week to Washington DC to attend CPAC, the Conservative Political Action Conference, hosted by the American Conservative Union. Not a lot of people from Austin made it there, but I had extra reasons to justify the trip as I was covering the conference for Blogcritics Magazine and also attending the Republican Liberty Caucus convention right afterwards. It also helps that my parents live in DC and I could stay with them white visiting.

CPAC is billed as the biggest gathering of conservatives in the nation and this year they claimed their largest attendance ever at 11,000. I’m not sure I believe their attendance total, but there was certainly a pretty impressive turnout with a lot of big name guests making appearances. Of course, the thing CPAC is most widely known for is their presidential straw poll, which is the first major indicator of which way conservatives are leaning for the next presidential election. More about that later.

CPAC has also become a focus for controversy for a variety of reasons. This year they became the target of activists on the religious right for their policy of including gay conservative groups like GOProud to participate, resulting in a walkout by many social conservatives. By the time the conference was only over for a few days it became the target of controversy again as newly elected ACU Chairman Al Cardenas declared that they would reverse their past policy of inclusion and establish litmus tests for involvement based on positions on social issues, likely excluding all gay groups and many libertarian-leaning groups and tea party groups as well.

This may be a problem for CPAC next year as the attendance this year was heavily dominated by libertarian-leaning groups like Young Americans for Liberty, the Republican Liberty Caucus, Campaign for Liberty and Students for Individual Liberty, who between them turned out more than a third of the total attendance at the convention. If they force the pro-liberty groups out they may have a more traditionally conservative convention, but it will be much smaller and certainly less representative of the spectrum of the political right.

As an attendee, the controversy at CPAC is part of what made it fun. There were arguments in the halls, vocal protests, boorish behavior on all sides, crazy media coverage and a circus-like atmosphere. I spent a lot of my time at the Republican Liberty Caucus booth shaking hands and giving media interviews, but I also got to wander around and talk to members of the various factions represented and get a feel for how diverse and dynamic the right-leaning grassroots really are.

As there is in the Republican Party, there was a clear disconnect between the interests and ideology of the attendees and the kinds of speakers the management thought it would be a good idea to invite. As it turns out, the roster of establishment politicians and pundits brought in to speak had very little in common with the activists who made up the audiences. They represented the political establishment and the attendees were mostly there to talk about and agitate for change and reform. Not surprisingly this resulted in some chaos.

To their credit, the management made some effort to keep conflicting groups separate, at least in the exhibit hall where most of the groups had their main presence. Young Americans for Liberty was as far as possible from Young Americans for Freedom (AKA Young American Fascists). The pro-Israel group with their prominent “Palestinian Wall of Shame” were in a separate room from groups like Muslims for America and the strongly anti-Israel John Birch Society. They also grouped friendly groups together, so there was a libertarian area and a section for religious conservatives. Some of the groups represented were just weird. I’m still trying to figure out the guys wearing red sashes and apparently advocating feudal monarchy and a religious inquisition.

Certainly the high point of the convention for observers and controversy fans came when they presented the Defender of the Constitution award to former Defense Secretary Donald Rumsfeld. Rumsfeld is a fascinating guy and very entertaining, but he’s not known as a Constitutional scholar or even having any particular interest in the document. The irony was not lost on CPAC attendees and the management went out of their way to heighten the tension in a way I can only think was deliberately planned to create controversy and press exposure.

If it had just been Rumsfeld alone, there would have been some mild protests from the growing non-interventionist right. But to really stir things up they scheduled Senator Rand Paul first so that all of his supporters, who tend to be anti-war, would be in the main hall. Then they brought in Dick Cheney, who many Paulistas actively hate, to introduce Rumsfeld. By the time poor Rummy took the stage the audience was whipped into a frenzy, shouting him down, getting dragged out by security and ultimately with almost 400 people walking out in protest. This despite efforts by Ron Paul and Campaign for Liberty to persuade their followers not to engage in any form of demonstration.

There were other small controversies as well. No one came to the Newt Gingrich book signing while literally thousands lined up for Ron Paul’s signature. Governor Gary Johnson almost wasn’t scheduled to speak and finally got a terrible early morning spot. In his speech he declared that he was running for president and then was almost dragged from the stage after only 15 minutes despite protests from the crowd. A small faction of Ron Paul supporters misbehaved in various ways, protesting during several speeches, and then goading Donald Trump into declaring that Paul was not a realistic candidate, which stirred up more controversy. And then Young Americans for Freedom – which I thought had been disbanded in the 1980s – took a leap for big press when they followed the straw poll by announcing that they were kicking Ron Paul off of their board, leading to an inevitable backlash.

But do you know who didn’t cause trouble and wasn’t controversial? GOProud and other gay groups. They didn’t protest, didn’t stir up trouble and behaved like professionals. I got to learn a lot more about them, and it turns out that GOProud aren’t a bunch of radicals. They don’t even support gay marriage or getting rid of Don’t Ask Don’t Tell. They’re more socially conservative than many mainstream Republicans, despite being gay.

There was also a lot of controversy raised in the right-wing media about CPAC selling out to Muslim fundamentalists based on the presence of some anti-Israel groups like the John Birch Society, the fact that one of their board members is Grover Norquist whose wife is Arab and because they let a group called Muslims for America attend. Our RLC booth was right next to the Muslims for America booth. I’ve never met a nicer set of young folks. They’re about as uncontroversial as you can get and just want people to understand that not all muslims are terrorists and quite a few of them vote Republican. I felt kind of sorry for them and it was quickly apparent that all the controversy was manufactured hype from the far right fringe.

I got to hob-nob with some minor political celebrities and see some excellent speeches. Rick Perry was there with Michael Williams and both performed well. Perry’s speech was strong and well received and he’s looking very presidential, despite protestations that he’s not running. Talk radio host Herman Cain also made a very strong speech, though it didn’t help him much in the CPAC straw poll. I was also quite impressed with New Jersey Governor Chris Christie who seems to be a straight shooter with a lot of good ideas – appealing anyone looking for an alternative to the mediocrity which is Romney. And perhaps the best part is that the unctuous Mike Huckabee chose not to attend and was absolutely not missed at all. I had responsibilities so I couldn’t see all the speeches or shake all the hands I might have wanted, but I spent some time with Governor Gary Johnson and his crew and found him more polished and more appealing than I already knew him to be. If he could go around the country and speak to every voter in person for 10 minutes I’m convinced he’d be our next president.

And, of course, the crowning moment of CPAC was the straw poll which was conducted on Thursday and Friday with the results announced at the end of the conference. Ron Paul won the poll by a sizeable margin, with Mitt Romney coming in a respectable second and Gary Johnson coming in third just ahead of Newt Gingrich and Chris Christie. Perhaps most interesting about the poll was the less publicized section of questions about issues and attitudes, which showed overwhelmingly fiscally conservative and limited government viewpoints among the attendees, along with a desire to downplay divisive social issues.

Almost immediately the spin was out in the media that Paul essentially bought the poll by bringing in ringers to vote and that none of it meant anything, but the truth is that the only voters actually bussed in were brought by Romney and that most of the Paul supporters paid their own way, though at a discounted ticket price. It’s also telling that Gary Johnson, who is arguably even more libertarian than Ron Paul, came in third in the poll ahead of a bunch of establishment candidates, as well as coming in first in the little known poll for second choice. The attendees at the convention skewed very young and very much towards libertarian views, representing the tea party and the grassroot. They responded to candidates who had a message of change and reform.

Various groups tried to counter or balance the results of the straw poll and got some media attention for it. Hot Air did an online poll which produced very different results leaning towards more traditioal conservatives. TownHall has offered a series of monthly polls which seem much closer to realistic Republican primary results and the Republican Liberty Caucus did a straw poll at their own convention right after CPAC where Governor Gary Johnson won first and Ron Paul came in second.

While it remains clear that former Governor Mitt Romney remains the candidate to beat, that was also true of Rudy Giuliani in 2008 and he went nowhere fast. Romney may be the establishment choice and the nominal frontrunner in the Republican primary, but his association with socialized medicine is damning and his efforts at CPAC were fairly feeble. His campaign booth in the exhibit hall was abandonned most of the time and the new slogan he debuted – “Believe in America” – is as bland and unappealing as Romney himself.

CPAC clearly showed that there is enormous diversity on the conservative right and a lot of potential for a dark horse candidate to challenge President Obama. I think that after CPAC the field is still very much open and we can look forward to an exciting primary campaign. What remains to be seen is whether the diverse and divisive right can iron out some of their differences and get behind a candidate with wide acceptability.

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Budget Cutting Goal Should be $1 Trillion or More

March 6th, 2011 ·

Watching Meet the Press this morning I felt vaguely ill as the mendacious Dick Durbin (D-IL) and the reprehensible Lindsay Graham (R-SC) discussed the budget. Durbin was in the ridiculous position of arguing that the Democrat effort to cut the President’s budget proposal by $41 billion was a meaningful cut and Graham was in the equally ridiculous position of arguing that the $100 billion cut proposed by Republicans was more than vaguely meaningful.

In reality, the president’s proposed budget is $638 billion higher than the 2008 budget and has a deficit of over $1.1 trillion. It only looks smaller in comparison to his last budget which spent an unbelievable $3.3 trillion in a single year. The truth is that neither the Democrat cuts defended by Durbin nor the Republican cuts defended by Graham are a fraction of the amount needed to produce a responsible budget. $100 billion is less than a 3% cut in the proposed budget and $41 billion is less than a 1.5% cut. Republicans promised to cut to 2008 spending levels, yet their proposal is less than 1/6 of that amount.

The hard truth is that we are not going to make real progress on having a responsible budget unless we look at some of the sacred cows which legislators have so far refused to touch. Senator Rand Paul (R-KY) has a promising bill which would cut $500 billion, but even that is still inadequate. It suggests excellent cuts and the elimination of some departments, but doesn’t go far enough.

For example, one of the sacred cows we need to go after is military spending. Paul suggests $84 billion in cuts. That’s based on continuing the current wars and deployments at close to the same level. I’d suggest going much farther. Get the troops our of Afghanistan and Iraq. These are wars which no longer have a purpose and cannot possibly pay off in proportion to the cost. There’s nothing to be gained there. Cut the military budget back to year 2000 levels, adjusted for inflation. That would be a cut of about $330 billion. It would allow the military to continue to operate and maintain all of its existing obligations but it would cut out the specific costs associated with current deployments and some new projects.

Next cut. Federal spending on unemployment has almost tripled in the last decade. It is utterly unjustifiable. Extending benefits to 2 years or more cannot be supported in the long term. Cutting it back to year 2000 levels adjusted for inflation would cut another $400 billion from the budget. It’s an entitlement which we can afford to go after and absolutely must. The extension of unemployment is irrational and undermines the business employment environment. People need to be pressured to go back to work at lower salaries if necessary and do their part in bringing wages down to strengthen the economy.

Another obvious cut is Social Security. We have to push back the retirement age. It should be immediately pushed back to 70 from the current level of 67 and pushed back 1 year every 3 years until it reaches 75. The system was originally designed for a population which had an average life expectancy of around 62. People weren’t expected to live to collect Social Security for more than a couple of years. They are living more than 20 years longer today and the retirement age must be adjusted to address that. The immediate yearly savings would be only about $150 billion, but the long term effect would be much more substantial.

So there, starting with Rand Paul’s modest $500 billion in cuts and adding just three more cuts, two in areas which he doesn’t even touch, we could cut the budget by a total of $1.3 Trillion, and we haven’t even gone after Medicaid yet. That would eliminate the deficit and potentially leave us with a small surplus to apply to the debt. It would only take us back to a year 2005 level of spending overall, but that leaves us with a target for 2013 of cutting $600 billion to get us back to a year 2000 level adjusted for inflation.

The independent Debt Commission has declared both the House Republican plan and the President’s budget contain far too few cuts, saying that “neither plan goes at all far enough to deal with our medium- or long-term fiscal challenges.” You have to wonder why we have this commission of experienced elder statesman if neither party is going to listen to them.

As Rand Paul has demonstrated this is not rocket science. It just requires the guts and perhaps the ruthlessness to do what needs to be done. He’s given us a starting point. Let’s take out the red pen and start cutting in a serious way.

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Ronald Reagan, The Model of Moderate Libertarianism

March 6th, 2011 ·

This weekend marked Ronald Reagan’s 100th birthday. I’m not going to go all gushy and talk about how wonderful he was or what an inspiring figure he was. Plenty of people are already doing that. I wanted to focus on one aspect of his leadership which has personal relevance to those of us who are libertarians within the Republican Party. We remember and we cannot let others forget that although he was a conservative, Ronald Reagan was also self-admittedly a libertarian and saw those two perspectives as intimately linked.

One of the best ways to understand how Reagan thought is to read the 1975 interview with Reason Magazine in which he lays out his political philosophy and explains how true liberalism, contemporary conservatism and libertarianism are basically aspects of the same basic ideals. He said:

I believe the very heart and soul of conservatism is libertarianism. I think conservatism is really a misnomer just as liberalism is a misnomer for the liberals – if we were back in the days of the Revolution, so-called conservatives today would be the Liberals and the liberals would be the Tories. The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom and this is a pretty general description also of what libertarianism is.

In the general push to iconize Reagan as an abstract figure we often forget how truly smart and insightful he was. He had real principles yet he understood that those principles had to operate within the limitations of a flawed political system and that ideals had to be implemented incrementally, seizing opportunities where they presented themselves. This remains the strategy for libertarian Republicans to this day — to pursue a moderate course within the political process towards a libertarian ideal. As Reagan demonstrated, this strategy is one which works and which can produce substantial change in government, though looking backwards we could wish he had done more to pursue his ideals and that his efforts had been continued by his successors.

Reagan himself met with both success and failure in moving the government in a more positive direction. He was able to deal with one of the worst financial crises in our history using mostly free market solutions and without generating the same kind of massive debt. Yes, he had budget deficits and grew the national debt alarmingly, but he did not grow the government bureaucracy at anything like the level of his predecessors or successors and he produced concrete results from his spending in bringing an end to the cold war and putting the economy back on track. He lowered inflation from 12.5% to 5.5% and unemployment from 9.7% to 4.4%. He lowered interest rates, restored the failing housing market and grew GDP by 31% in 8 years.

These are all hallmarks of a successful presidency, but for my more left-leaning libertarian friends who take particular exception to the empire building efforts of recent administrations, one of the things about Reagan which stands out as unusual is that while he did build up the military and did oppose Russian imperialism, he did not engage in imperialism himself. He scrupulously avoided it. If your complaint about the Republican Party of George W. Bush is the expansionism of the neocons, a return to Reagan’s foreign policy of peace through strength ought to be appealing. Reagan engaged in no long term troop deployments. His primary use of the military was to directly defend US citizens and interests in very short applications of force for specific purposes.  Some may complain about the covert operations which took place during his time in office, but in cost and commitment they were minor and sometimes produced very positive results.

Reagan’s only major deployments of troops were the 1200 Marines sent to Lebanon for about a year in 1983 and the very brief invasion of Grenada with 7000 troops and a duration of less than 2 months. No long-term occupations aside from those he inherited and no efforts at expensive nation-building or endless peacekeeping operations. Yes, there were small and inexpensive covert operations and efforts to influence political developments in key nations, but Reagan clearly didn’t like the idea of an American empire any more than he liked the idea of a Soviet empire.

For a president who took America to the pinnacle of its military and economic power, this restraint and lack of ambition to exceed the proper limits of the Constitution and good government was in many ways Reagan’s most important — and perhaps most quickly forgotten – legacy. Reagan knew where to set the limits and was not seduced by the temptations of power. This is why libertarians flocked to join his administration and why so many of us look back to him as an example of the kind of leadership this nation needs but has not had for far too long. He lay the groundwork for further libertarian reform of government and built up political capital for that purpose which was then squandered by George H. W. Bush and Newt Gingrich and other lesser leaders.

I’m not going to start whining about “where is our new Reagan.” There may never be another Reagan. But we can keep his success in mind and remember that the values and ideals of libertarianism are most likely to be implemented quickly and effectively if we take the moderate and pragmatic approach which he practiced and use his example to win over less libertarian Republicans who may not fully understand or embrace our ideals, but still revere Reagan as an icon. With his strategy we can erase the errors of the last 25 years and pick up where he left off.

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Repeal or Revise: The Problems with the Patriot Act

March 6th, 2011 ·

One of the few good things about the USA PATRIOT Act is that it has to be reviewed and renewed periodically by Congress. The bad news is that it is up for renewal at the end of this month and President Obama has recommended renewal of the act without substantive changes. This is not the kind of change many of his supporters wanted to see, and there are also many civil libertarians on the political right who would like to see the USA PATRIOT Act repealed or at least revised to eliminate some of the worst provisions.

There are several particularly bad sections of the act which run directly counter to the rights guaranteed and protected in the Bill of Rights and which ought to be considered for removal, or should to be enough to justify just not renewing the whole bill. If you aren’t aware of exactly what they are or why people object to them, here are the basics.

Section 206: Roving Wiretaps

This section allows the FBI to wiretap a phone or any wireless communications, including internet broadband transmissions, without having to get a warrant or even provide the target’s name or phone number. They can basically just tap into any communications they want with no due process and no court approval. In many cases they just park a van near your house and monitor all of your communications with no notice, no warrant and no accountability.  Recent evidence suggests that abuse of this power has been widespread in tens of thousands of cases in the last 5 years.  This is an obvious and direct violation of 4th Amendment protections and should be repealed or revised to require judicial oversight.

Section 213: Sneak and Peak

This section allows secret searches of private property without notifying the resident. They can come to your house when you’re away, break in and search it and not tell you until after the fact. This can also be extended to electronic searches, allowing them to be conducted without prior notification. Again, a clear violation of due process under the 4th Amendment which should be done away with .

Section 215: Library Records

This section lowers the standard of proof needed to get a court order to access private records. It gets rid of the requirement to identify the target of surveillance and prove the relevance of evidence they are going after. It allows the FBI to get special warrants for all sorts of privately held business or professional records without necessarily demonstrating their relevance to any specific investigation. It essentially allows “fishing expeditions” where they gather data on speculation and try to develop a case from it.  It can also lead to malicious requests where they tie up the resources of an organization or company.  Clearly an abuse of due process.

Section 505: National Security Letters

Authorizes the use of non-judicial National Security Letters in place of warrants  to compel the disclosure of sensitive information held by banks, credit companies, telephone carriers and Internet Service Providers, among others. Particularly troubling is that these letters also carry a provision prohibiting those who receive them from making any public disclosure of the fact, an effective gag order which violates several sections of the Bill of Rights.  The ACLU has filed a number of lawsuits in defense of victims of this abusive practice.

Section 802: Expanded Definition of Domestic Terrorism

This section broadens the definition of a terrorist to include domestic as well as international terrorists and does it with language sufficiently broad to potentially include many groups whose forms of protest or activism are contentious or disruptive, but not necessarily actually criminal or violent.  Under this definition groups like Greenpeace, Operation Rescue, environmental groups and many anti-government protest groups could be classed as terrorists.  There is also clear indication from the Department of Justice that they would like to expand application of this provision even further.  This is clearly contrary to free speech and free assembly provisions of the 1st Amendment.

Section 806: Asset Seizure

This expands on the practices we’ve already seen abused extensively in the War on Drugs, based around the illogical premise that if someone is merely suspected of a crime it is acceptable to seize their property or their financial assets as evidence or potential evidence, even if they are never charged or sent to trial.  In these cases the seized assets are almost never returned to the owner and there is no real process for redress or an appeal when charges are not filed.  This has been a problem withe the Drug War and the same concerns apply here.  This section and several related sections allow the seizure of the assets of organizations and individuals suspected of supporting terrorism even when they have been convicted of no crime.  This section builds on the extraordinarily broad language of section 981 of the US Civil Code  and goes beyond property used in a crime to include property which might be used in a future crime and property belonging to anyone defined as a “source of influence” of terrorism, whatever that means.  This concept is derived from the RICO statute, but without the rules requiring the proof of a criminal conspiracy which it includes.

Section 6001: Lone Wolf

This section allows the government to obtain secret surveillance orders against any individual even if they are not directly linked to any international terrorist group or foreign nation.  It basically allows them to spy on anyone and they don’t have to ever inform the subject they have done so.  The entire idea of secret warrants is contrary to the principle of due process under the 4th Amendment.  Under this provision the government can essentially spy on anyone on the pretext that they might potentially communicate with a terrorist or terrorist organization, or just because they think they look suspicious.  There are no real qualifications and secrecy means there’s no accountability either. 

Of course, all of these sections of the USA PATRIOT Act are to some degree interconnected with other parts of the act and it’s difficult to just eliminate a few of them without changing many other parts as well.  This suggests that allowing the entire set of laws to expire at the end of the month would be the most practical solution.  But at the very least, these 7 sections ought to be looked at closely and made to conform with the protections guaranteed in the Bill of Rights.  Searches should not be conducted without judicial oversight, suspects should not be investigated and put under surveillance without due cause and property rights should be respected unless someone is actually convicted of a crime.

The Bill of Rights exists for a reason and it has become clear that there is no threat to this nation from terrorism or other sources which justifies the multi-front assault on our rights which is embodied in the USA PATRIOT Act.  It is the greatest assault on our civil liberties as a people since the time of the Civil War.  If you feel that these draconian measures are justifiable for security reasons and okay in general because you aren’t a terrorist or likely to associate with terrorists, consider how broad this language is and how easily it could be abused and used against even the most innocent among us for political or personal reasons.

You don’t have to sit back and wait for Congressmen who have shown little interest in correcting their past errors to come to their senses. You can help them along by contacting your Congressmen or those on specific relevant committees using the convenient information on ContactingtheCongress.org.

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Should Gambling be Expanded in Texas?

March 4th, 2011 ·

It is estimated that Texas currently loses over $8 billion a year in tax revenue to neighboring states which have legalized gambling. Some level of legalized gambling would help considerably to address state budget shortfalls. The proposal currently being considered by the state legislature is to legalize slot machines (video lottery terminals) only at racetracks. It is estimated this would add $2-$3 billion to state revenue. Other forms of gambling expansion which might be considered include poker parlors, slot machines at other locations, indian gaming and full casino gambling.

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